Wringing Out Revenue From Retroactive Rebates

By Jerry Schmits Director, KLH Energy Solutions | July 06, 2014

Hotels have it tough in the energy game. Unlike retail stores or office buildings, hotels run 24/7 in order to serve guests at all hours. Not only that, but hotels continue to add perks to sweeten the pot for prospective customers. Now hotels must not only offer comfortable rooms, but heated swimming pools, spas, top-notch health centers, 24-hour restaurants, and more. These additional features, along with the hotel industry's doors-always-open business model, guzzle energy and leave hotel owners paying astronomical utility bills.

In fact, hotels and motels spend an average of $2,196 per available room each year on energy, which equates to a total of 6 percent of all hotel operating costs. This is no small number, and for that reason, hotels should be constantly seeking ways to reduce energy consumption and regain lost revenue.
The best way to achieve this goal is to improve energy efficiency from energy sucking systems. These improvements not only reduce energy consumption as a whole, but are often eligible for rebates or tax incentives.

Proactive Versus Retroactive Rebates

Most often, hotel owners choose to pursue proactive rebates. These rebates require owners to identify areas of high energy use, develop an energy reduction plan, and finally preauthorize that plan with the rebating utility company. Then at the completion of the project, the owner receives the rebate. Proactive rebates keep hotel owners motivated to achieve energy efficiency, and if filed correctly, promise a prescribed amount of money upon completion. For this reason, most hotel owners are proactive in their approach to energy efficiency rebates.

However, it's not uncommon for hotel owners to have their rebate application rejected due to incomplete information or documents filed incorrectly. When an application is rejected, statistics show that many are never resubmitted. Despite the marketing efforts of utility companies and state energy regulatory commissions, many rebate opportunities are simply never pursued. The good news is that many rebate providers have provisions in their programs to allow rebate applications to be submitted retroactively- after the qualifying project is complete.

Retroactive rebates are reimbursements that hotel owners can file for after the completion of an energy efficiency project. That way, if an owner originally misfiled an application or discovered a rebate at the completion of a project, they may still qualify for a reimbursement. Typically, owners can file retroactively for the same types of projects, making retroactive rebates a great way for hotel owners to wring out every penny for their energy conscious efforts.

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Social Media: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.